Inspections and Appraisals - what is the difference? A lot! The words and the part of the process are totally different. This is the #1 source of confusion that buyers, and not just first time buyers, have.
The Inspection:
- Comes before the appraisal
- Inspectors are hired and paid for by the buyer
- Inspectors go through the entire home and inform the buyer about the house and it's components. The inspector will point out how systems work, what maintenance items will need to be attended to, and if there are major defects in a home
- Inspectors give the report of their findings to the buyer
- Inspection reports are for the buyer NOT the lender
The Appraisal
- Comes after the inspection period
- Appraisers are hired by the lender, but the buyer is responsible for the cost. This cost is part of the closing costs quoted by the lender
- Appraisers measure the home and look for certain items that are important to safety, security and saleability of the home.
- Appraisers do not report directly to the buyer. The buyer is not invited to the appraisal.
- The appraiser works for the lender; their job is to give the lender an assessment of the value of the property that is the security for the loan the buyer is obtaining. The appraisal is for the lender NOT the buyer.
Before you go looking for homes, make sure that the real estate agent you are working with sits down with you and goes through the whole process. I am of the opinion that words matter because they mean things, which aids in communication. Taking the time at the beginning to make sure everyone is using the same terminology will make the transaction a whole lot less confusing! There is a big difference between inspections and appraisals, and your real estate agent should be able to explain that.
If you are thinking about purchasing a home this spring, please call me to schedule a time to talk through the whole process.
Suzie Townley
913-322-8301
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